We need middlemen – Shangula
Minister spits fire over health tender cancellation
The health minister gave a list of justifications as to why middlemen remain inalienable to the ministry's procurement needs.
Health minister Dr Kalumbi Shangula yesterday implied the ministry will continue using middlemen in its bulk procurement processes because “manufacturers will not listen” to the ministry under the current circumstances.
Defending the use of middlemen yesterday in the National Assembly, he also said the ministry needs ‘chain experts’ in its procurement processes.
Millions of dollars allocated to the ministry end up in the pockets of middlemen, and the ministry has often been urged to procure its needs directly from manufacturers in order to maximise the funds allocated to it.
In 2021, the health ministry cancelled a tender to procure Covid-19 vaccines on its behalf after the public decried the decision to rope in middlemen instead of using money optimally to procure as many doses as possible.
In the end, the ministry directly brought in vaccines without the use of third parties, a precedent many urged should become the norm in the public sector.
Feasibility
“We have heard calls for the ministry to buy directly from manufacturers. We must first understand its feasibility within the law,” Shangula said.
“The law allows the ministry to buy goods and services to the value of not more than N$25 million or US$54 000. No manufacturer will listen to you when others are buying to the value of millions [of] US dollars.”
He added that the procurement of health commodities is complex and requires an understanding of the practical aspects of the health commodity supply chain, as opposed to unproven theoretical expectations.
“It will be a win-win outcome when health commodity supply chain experts are consulted and their advice is taken seriously,” the minister said.
This year, it was reported that a politically-connected company with one employee was awarded a N$141 million health supply tender. Questions were asked as to how this company, with its evident lack of capacity, can possibly do a better procurement job than a fully-fledged ministry.
Costly emergency procurement
Shangula yesterday used the occasion to lambast the Central Procurement Board of Namibia (CPBN), which he accused of forcing the ministry into costly emergency procurements because of its perpetual delays in awarding tenders submitted to it.
He said a lion’s share of his ministry’s budget allocation goes to the procurement of clinical supplies, medical equipment, pharmaceuticals and capital projects. And because many of these procurements involve more than the ministry’s internal threshold of N$25 million, the bulk of it is handed to CPBN to handle.
“Most of the tenders, from catering and clinical supplies to the supply of pharmaceuticals, have languished at the CPBN without finalisation in sight,” he said.
“The ministry has been compelled to engage in costly emergency procurement activities, where costs are astronomical, degrading our efforts to secure value for money.”
CPBN should not be allowed to delay evaluations “as they wish”, a process that sometimes takes six months instead of 14 days, Shangula fumed.
“The CPBN should not be allowed to continue with adjudication of bids above the validity period of 180 days, just like any other public entity.”
Burden
In February, the CPBN cancelled medical supply tenders worth N$2.8 billion as a result of public outcry on how the contracts were awarded.
This infuriated Shangula, who yesterday said: “The CPBN should consult extensively with public entities before cancelling any procurement process, as was in the case of the supply of clinical items.
“The reasons advanced by CPBN for the cancellation might be true for some items, but there might be a number of items which had no issues and could have been awarded to minimise the burden of having all items not on contract.”
Defending the use of middlemen yesterday in the National Assembly, he also said the ministry needs ‘chain experts’ in its procurement processes.
Millions of dollars allocated to the ministry end up in the pockets of middlemen, and the ministry has often been urged to procure its needs directly from manufacturers in order to maximise the funds allocated to it.
In 2021, the health ministry cancelled a tender to procure Covid-19 vaccines on its behalf after the public decried the decision to rope in middlemen instead of using money optimally to procure as many doses as possible.
In the end, the ministry directly brought in vaccines without the use of third parties, a precedent many urged should become the norm in the public sector.
Feasibility
“We have heard calls for the ministry to buy directly from manufacturers. We must first understand its feasibility within the law,” Shangula said.
“The law allows the ministry to buy goods and services to the value of not more than N$25 million or US$54 000. No manufacturer will listen to you when others are buying to the value of millions [of] US dollars.”
He added that the procurement of health commodities is complex and requires an understanding of the practical aspects of the health commodity supply chain, as opposed to unproven theoretical expectations.
“It will be a win-win outcome when health commodity supply chain experts are consulted and their advice is taken seriously,” the minister said.
This year, it was reported that a politically-connected company with one employee was awarded a N$141 million health supply tender. Questions were asked as to how this company, with its evident lack of capacity, can possibly do a better procurement job than a fully-fledged ministry.
Costly emergency procurement
Shangula yesterday used the occasion to lambast the Central Procurement Board of Namibia (CPBN), which he accused of forcing the ministry into costly emergency procurements because of its perpetual delays in awarding tenders submitted to it.
He said a lion’s share of his ministry’s budget allocation goes to the procurement of clinical supplies, medical equipment, pharmaceuticals and capital projects. And because many of these procurements involve more than the ministry’s internal threshold of N$25 million, the bulk of it is handed to CPBN to handle.
“Most of the tenders, from catering and clinical supplies to the supply of pharmaceuticals, have languished at the CPBN without finalisation in sight,” he said.
“The ministry has been compelled to engage in costly emergency procurement activities, where costs are astronomical, degrading our efforts to secure value for money.”
CPBN should not be allowed to delay evaluations “as they wish”, a process that sometimes takes six months instead of 14 days, Shangula fumed.
“The CPBN should not be allowed to continue with adjudication of bids above the validity period of 180 days, just like any other public entity.”
Burden
In February, the CPBN cancelled medical supply tenders worth N$2.8 billion as a result of public outcry on how the contracts were awarded.
This infuriated Shangula, who yesterday said: “The CPBN should consult extensively with public entities before cancelling any procurement process, as was in the case of the supply of clinical items.
“The reasons advanced by CPBN for the cancellation might be true for some items, but there might be a number of items which had no issues and could have been awarded to minimise the burden of having all items not on contract.”
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